Building tomorrow’s bank

My good friend Conny Dorrestijn shared this article she wrote on teenager's views on money and banking. I thought it so good that it's worth sharing here:

Sitting in the hotel bar of a conference I recently attended on payments, I pondered with my colleagues “Are we sure we are really building the payments infrastructure for tomorrow here?” Looking around me I saw a long grayish stream of suited men, a few women and none of particularly young age.

A glance in the mirror later that night brought the truth really home; we might feel very young, we are not young. We live in our own time capsule and although we might raise teenagers and work with people who act like them, we are mature adults with a lot of baggage called experience. Whatever we think up, whatever we create, it will be impacted by the world we knew yesterday. So with a group of people we then decided it might be fun to talk with young people to find out how they feel about money, budgeting and the role banks or others can play.

The minute I wrote the questionnaire and posted it on Twitter, an email popped up in my inbox from Morgan Stanley, who had just issued a report by a 15-year old intern on how teenagers view and use the media. My dear, it caused a huge stir in the City of London, they had six times more enquiries than with any other analyst report. Posting my survey on Twitter was my first mistake, kids don’t like it.

So back to good old email, added with some Facebook and Hyves and the responses started coming in from around the world.

In this short article I would like to give the kids, neighbours, interns, nephews and nieces a voice. Sure, the sample is limited and not entirely scientifically significant, but we just intended to get the dialogue started. The accents per region (Europe, Middle East and Africa, Asia Pacific and the US) might differ, all kids consented that you need money to live, to pay for food, college, nice stuff and to be happy or as one aptly put it: “people need money to be happier than they already are”.

‘Cool’ banks…

We first asked what they would do with
an unexpected gift of 100 US dollars. Just over half of the kids said
they would buy something they had wanted for a long time; the other
half would save it, either with a bank or at home in a safe place. We
then moved on to asking them about ‘cool banks’, well you can just
imagine how cool they think we are as industry…

“Money comes and goes in life. It’s just the circle of life” – Dominic Sean (18), Malaysia

A quarter of the kids said that we should not bother, banks are never cool; Apple and Facebook, narrowly followed by Coca Cola were then pointed out as possible cool brands to have for a bank. Having said that, when we asked what other alternatives there might be for a bank from the ones we know today, the answers were surprisingly conservative. None opted for a Telco provider as the bank, none for the supermarket, a few suggested we should form groups of people in our trusted community and thus create a bank, but most (80%) said they would only trust their money with ‘banks as we know them today’.

Payments and gizmos

When we came to the payments topic, we asked how they would like to repay a friend when they had borrowed money. With the latest findings of the Morgan Stanley research in mind, which stated amongst others that kids increasingly use their game computers to communicate, we offered a wide range of suggestions (cash, mobile banking, game computer or a bank card payment). One thing became clear, we will not live to see the cashless society become a reality in our lifetime. All teenagers are aware of PIN and card payments, but most opted for cash money (“then you know for sure it’s done….!!!!”).

Payment through a bank card drew a look warm response and the mobile phone and gaming console did not feature at all. Having said that, we should take this point on board, unknown is unloved and teenagers only judge the stuff they experience, not the things we write and talk about.

True of false – what do they know about finance?

The second part of the survey centered on a number of true/false/not sure statements. You will be surprised at some of the feedback. I am delighted to say that despite the public moaning about kids that only worry about their image and that they don’t know the difference between value and price, I am happy to say no single respondent fell into the trap about the image of credit cards – silver, gold and platinum.

The statement “having a lot of credit cards means you are an important person” was well put in its rightful place by all. Nonsense! I was slightly surprised that still 20% of kids were not sure whether you lost your money in your internet banking account if you lost your computer.

“I want to buy games, clothes, important things like food and save for college” – Kaylee (13), United States

That sense of uncertainty was a lot higher with the mobile phone. Half of the kids were not sure if a mobile phone is safe enough for banking and 40% were convinced that a phone is not safe enough to make payments. Again, work to do when it comes to the perception of safety… However when we stated “would you switch banks if they gave you an iPhone, half were happy to jump ship.

On the topic of education, only half of the kids were convinced that borrowing money always costs money. Admittedly, this might be a mistake on my side; we did not specify that we meant borrowing from a bank, but still… Finally, nearly all respondents said that the statement that banks never lose your money was entirely false. Would they be reading the papers after all?

As stated, this article and the questionnaire were merely tipping a toe in unchartered waters. But why don’t you talk to your own teens over dinner, or at another moment when you are able to get through the one syllable answers. We had a vivid debate with a large group of 14-year old boys and found that they would be quite happy to learn to budget, but we don’t seem to teach them. They don’t like running out of their mobile phone stipend, but how can they prevent this when all the world wants to do is wet their appetite for consumption.

“People need money to spend so our economy goes back to what it used to be – growing” – Thomas (18), Belgium

I realise more than ever that yes, personal finance and budgeting should be on the menu in late primary and secondary school and we as an industry should take this on board as well. Heaven knows, that with the current national deficits they and their children will have to budget to get through life. With some googling I found a wealth of website to help them and us with this educational task. But how to reach them? Back to the golden rules of the recent Morgan Stanley research. What’s hot? Anything with a touch screen, mobile phones with a large capacity for music, and portable devices that connect to the internet and seriously large tellies. What’s not? Anything with wires, phones with black and white screens, clunky ‘brick’ phones and devices with less than ten-hour battery life.

Worried that we now give the secret away? Don’t be. Most kids don’t read anything on paper, so this article will go perfectly unnoticed.

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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sander cok

Dear Connie,
I’m afraid you’re right about thinking we’re young. I (45) gave my son (17) a book and said ‘the author is a nice young philosopher’. ‘Young’ my son asked. Yes my age. He was in stitches and I laughed uncomfortably.
About the kids preference for cash: when it is about money, they appear to have the same risk avoiding attitude – despite their risk neglecting adolescent brain – as an adult and like finality of payments.
Sander Cok
ING Wholesale Banking
Payments and Cash Management